HOUSE prices surged by 8.4% over 2013 across the UK, Nationwide have reported, with prices in Wales up 6.1%.

Prices in Wales increased by 2.9% in Quarter 4 and were up 6.1% over the year as a whole.

The average price in Wales is now £139,722, compared to a UK average of £175,826.

The annual increase in prices across the UK is the biggest jump seen since June 2010.

Among the major towns and cities, Manchester was named by the study as the best-performing area for house price rises in 2013, with prices there up by 21% typically over the last year to reach £209,627 typically.

Robert Gardner, Nationwide’s chief economist, said the upturn in prices has become “increasingly broad-based over the course of 2013”.

He said: “For the second successive quarter, all 13 UK regions saw positive annual house price growth in quarter four.

“Part of the reason for the acceleration in house price growth is that the supply side of the market has not kept pace with the upturn in demand, even though buyer numbers remain subdued by historic standards.

“For example, in quarter three 2013 the number of housing transactions in England was around 25% below pre-crisis levels, while the number of new homes built was around 45% lower.”

Mr Gardner said that current ultra-low interest rates are currently helping to keep home loans relatively affordable, with the typical mortgage payment for a first-time buyer equating to around 29% of their take-home pay.

But he added: “However, the risk is that if demand continues to run ahead of supply in the quarters ahead, affordability may become stretched.

“House price growth has been outstripping average earnings growth since the start of the year.”